One year out from 2011’s Bank Transfer Day, wise credit unions are still finding new and exciting ways to keep the cooperative buzz going ─ offering better products and services than consumers expect and many for-profit institutions choose to provide.
Membership across the industry is up 2.3% annually in 2Q 2012, according to Callahan & Associates’ Peer-to-Peer Software. And while there are a multitude of ways credit unions are attracting these members, free or value-added options continue to provide a strong pull for fee-weary consumers.
Year-over-year, the average non interest income earned per member is up roughly $14.30 dollars, but that doesn’t necessarily mean that credit unions are turning to fees to achieve this extra income. Actual fee income per member has increased only $3 over the same period, indicating that many credit unions are looking at alternative strategies like debit awareness campaigns to boost interchange and gain new wallet share.
Let The Games Begin
Gamification may be the new buzz words in mobile and online interactions, but its also a proven strategy for credit unions looking to influence real world behavior like debit purchases.
When Belvoir Federal Credit Union ($298M, Woodbridge, VA) began entering members in raffles for prizes like an iPod or gift cards every time they used their debit card, it dramatically enhanced the usage of the product. With one swipe equaling one entry and no limit on the number of times members could qualify, Belvoir saw a 3% boost in debit cards with at least one transaction, a 7% boost in total transactions, and a 10% boost in signature transactions.
Little Rewards = Big Impact
With its Fall “It Pays To Switch” campaign, it’s clear Freedom Credit Union ($586M, Warminster, PA) is not just refusing the strategy of charging members for traditionally free services like checking accounts ─ it’s actually paying them for it. Now, members can earn back $5 for every month they use their Freedom debit card, for up to one year.
While it may seem counterintuitive, other credit unions have had success with similar strategies. At the beginning of this year, First Community Federal Credit Union ($685M, Parchment, MI) brought together the best of both gamification and cash incentives by paying members up to $5 a month based on aggregate debit purchases, as well offering 12 weekly prizes of $500 to top users, and a grand prize of $5,000 based on aggregate activity for the full three months of the campaign. The result was an 11% bump in debit purchases and 9.2% growth in new accounts versus same month’s levels the year before.
Make It About More Than The Institution
Launched in 2011, Texas Trust Credit Union ($754M, Mansfield, TX) offers a debit campaign with four regional school districts that earns individual schools 15 cents every time a member used their specific, cobranded card to make a purchase.
To date, the program has generated over $138,000 for a vital cause, while creating real incentive for members to obtain and use a debit product. Other operating income (containing credit and debit interchange as well as any mortgage sales to the GSEs or unconsolidated CUSO income) is up over $240,000 at the credit union from 2Q 2011, and membership growth has gone from -4.33% to 7.09% over the same period.
Make It Personal
Ask incoming members about their experiences with their previous institution, and you may get responses that vary from mildly negative to a profanity-laced tirade. So why not give consumers a chance to vent some of that stress and make a financial change all in one fell swoop?
San Diego County Credit Union did just that with “Shred Your Big Bank Debit Card Day.” Timed to coincide with Bank Transfer Day, the one month long campaign gave consumers the chance to win $1,000, just opening by a new account with SDCCU and getting their picture taken as they shredded their old bank card. As a result, the credit union drew in members at a rate 235% higher than normal for that month, opened 4,049 new accounts (around 65% higher than their average rate), and even secured some extra social media buzz, including a 25% increase in Facebook likes.
Given the right messaging and support, there’s no reason a campaign like wouldn’t work for credit unions at any time of the year.